Correlation Between Fluent and DDC Enterprise

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Can any of the company-specific risk be diversified away by investing in both Fluent and DDC Enterprise at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fluent and DDC Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and DDC Enterprise Limited, you can compare the effects of market volatilities on Fluent and DDC Enterprise and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fluent with a short position of DDC Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and DDC Enterprise.

Diversification Opportunities for Fluent and DDC Enterprise

FluentDDCDiversified AwayFluentDDCDiversified Away100%
0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Fluent and DDC is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and DDC Enterprise Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DDC Enterprise and Fluent is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fluent Inc are associated (or correlated) with DDC Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DDC Enterprise has no effect on the direction of Fluent i.e., Fluent and DDC Enterprise go up and down completely randomly.

Pair Corralation between Fluent and DDC Enterprise

Given the investment horizon of 90 days Fluent Inc is expected to under-perform the DDC Enterprise. But the stock apears to be less risky and, when comparing its historical volatility, Fluent Inc is 3.76 times less risky than DDC Enterprise. The stock trades about -0.02 of its potential returns per unit of risk. The DDC Enterprise Limited is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  16.00  in DDC Enterprise Limited on November 27, 2024 and sell it today you would earn a total of  6.00  from holding DDC Enterprise Limited or generate 37.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fluent Inc  vs.  DDC Enterprise Limited

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-10010
JavaScript chart by amCharts 3.21.15FLNT DDC
       Timeline  
Fluent Inc 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.52.62.72.82.933.1
DDC Enterprise 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in DDC Enterprise Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, DDC Enterprise exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.120.140.160.180.20.220.24

Fluent and DDC Enterprise Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.21-3.9-2.59-1.290.01.282.573.855.13 0.0100.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15FLNT DDC
       Returns  

Pair Trading with Fluent and DDC Enterprise

The main advantage of trading using opposite Fluent and DDC Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, DDC Enterprise can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DDC Enterprise will offset losses from the drop in DDC Enterprise's long position.
The idea behind Fluent Inc and DDC Enterprise Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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